Volkswagen's Chief of Staff, Gunnar Kilian, steps down from the automobile company
Volkswagen, the German automotive giant, has unveiled a bold restructuring program aimed at transforming its business from combustion engines to electric vehicles (EVs) by 2030. The comprehensive overhaul will involve significant job cuts, slashed production capacity, leadership changes, and €4 billion in annual cost cuts, all designed to pivot the company towards EV competitiveness while navigating labor and market challenges.
The job cuts will see the reduction of 20,000 employees by 2030, mostly through voluntary departures and early retirements rather than compulsory layoffs. This move is part of a broader effort to cut annual labor costs by €1.5 billion to help offset the high costs of EV development and declining demand in Europe.
In addition, the restructuring includes cutting German production capacity by 734,000 units by 2030 to realign with its new EV focus. The company has also expanded the part-time retirement scheme and is offering severance packages for younger employees who voluntarily leave.
The program coincides with major leadership shifts, including the departure of HR chief Gunnar Kilian in June 2025. Kilian, who joined Volkswagen in 2000 and became one of the youngest DAX managers seven years ago, was instrumental in negotiating the voluntary workforce reductions and avoiding forced layoffs. His exit raises concerns about maintaining momentum and union relations during this period of social tensions and strikes threats from unions such as IG Metall.
Volkswagen has set an ambitious €4 billion annual cost-cutting target, with a significant portion coming from workforce reductions, to improve competitiveness against Chinese EV manufacturers and protect profitability. The restructuring program emphasizes avoiding forced redundancies by relying heavily on early retirements and voluntary severance packages, aiming to balance aggressive cost savings with social stability amid union opposition.
Besides workforce cuts, Volkswagen is also shifting resources to ramp up EV production and innovation, including new models and platforms, notably in China through joint ventures like FAW-Volkswagen.
Thomas Schäfer will assume Kilian's responsibilities as Volkswagen brand chief temporarily. The Supervisory Board of the Volkswagen Group made the decision to terminate Kilian's employment on Friday. The reason for Kilian's departure is differing views on the management of participating companies. Supervisory Board Chairman, Hans Dieter Pötsch, and CEO, Oliver Blume, have thanked Gunnar Kilian for his contribution to the transformation of the company in recent years.
It is worth noting that Volkswagen has recently recalled cars worldwide due to defective airbags, as of March 9, 2025. However, this fact is not directly related to the departure of Gunnar Kilian.
This restructuring program marks a significant shift for Volkswagen, as it seeks to position itself at the forefront of the EV revolution while addressing the challenges posed by job losses and labor relations.
- The restructuring program at Volkswagen, aimed at transitioning the business from combustion engines to electric vehicles, includes a significant shift in resources to ramp up EV production and innovation.
- The ambitious €4 billion annual cost-cutting target at Volkswagen will be achieved through various means, such as workforce reductions, slashed production capacity, and financial adjustments, all designed to maintain profitability in the face of increased EV development costs and declining demand in Europe.
- In the automotive industry, financing plays a critical role in the restructuring process, as Volkswagen seeks cost savings to remain competitive against Chinese EV manufacturers, particularly in resource-sharing ventures like FAW-Volkswagen, which focus on new models and platforms in China.
